Following is my response to an editorial in the Roanoke Times. It was published on Sunday.
In your editorial on July 7 (“This year’s Little Rock”), you mentioned an increasingly discussed option for our medical care insurance as “an enormously expensive single-payer system.” Yes, a single-payer system is costly, as there is no inexpensive option. Please note, however, the most attractive aspect of a single-payer system is that it would cost less than our current system.
A single-payer system is one in which a public agency handles health care financing while the delivery of care is handled by private providers. This is the system in most other industrialized countries. Sometimes this approach is called Medicare-for-all.
One of the reasons single-payer costs less than our current system is low overhead. According to the Kaiser Family Foundation and the trustees of the Medicare Program, administrative costs in Medicare are only about 2 percent of total operating expenditures. That figure is only a fraction of the 12-14 percent overhead typical of private health insurance companies.
Another reason for lower costs is private insurers have expenditures for advertising and promotional efforts, which can exceed 15 percent of total revenue. Single-payer plans like Medicare do not have such expenses.
Currently, in total health care expenditures, the U.S. spends more than twice per capita as advanced countries with single-payer systems. Countries with single-payer systems pay less for medical services than the U.S. because they typically negotiate more favorable terms with service providers and pharmaceutical companies.
Some critics of single-payer systems point to the high per capita medical costs of our single-payer plan, Medicare, in estimating the total expenditures for a Medicare-for-all plan. However, that is not an appropriate comparison. Our current Medicare system covers a population group with the greatest medical need (older people), while a Medicare-for-all plan would cover everyone, including many young people.
Yes, single-payer would mean more taxes; however, insurance premiums would be eliminated or reduced substantially. Since the overall per capita costs would be lower, taxes and premiums would be lower, meaning less money out-of-pocket.
As studies have shown for several decades, a single-payer system would produce quality medical care at substantially lower cost than our current system.